Scribd
Upload
10 views17 pages

Financial Ratios Analysis of FMCG Companies

This document analyzes various financial ratios for companies HUL, Nestle, Britannia and Marico over a five year period from 2007-2011. It includes ratios such as dividend per share, earnings per share, gross profit margin, operating profit margin, net profit margin, return on assets, current ratio, quick ratio, debt equity ratio, interest coverage ratio, inventory turnover ratio, debt turnover ratio, total assets turnover ratio, investment turnover ratio, number of days working capital and dividend payout ratio. The charts and analysis show that Nestle generally has high profitability ratios while Britannia tends to have lower ratios. Marico improved some liquidity and efficiency ratios over the five year period.

Uploaded by

Sumith Thomas
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
10 views17 pages

Financial Ratios Analysis of FMCG Companies

This document analyzes various financial ratios for companies HUL, Nestle, Britannia and Marico over a five year period from 2007-2011. It includes ratios such as dividend per share, earnings per share, gross profit margin, operating profit margin, net profit margin, return on assets, current ratio, quick ratio, debt equity ratio, interest coverage ratio, inventory turnover ratio, debt turnover ratio, total assets turnover ratio, investment turnover ratio, number of days working capital and dividend payout ratio. The charts and analysis show that Nestle generally has high profitability ratios while Britannia tends to have lower ratios. Marico improved some liquidity and efficiency ratios over the five year period.

Uploaded by

Sumith Thomas
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd

1 .

OPERATING RATIO
a) DIVIDEND PER SHARE Dividend per share = D-SD/S D = sum of dividend over a period SD = special, one time dividends S = shares outstanding for the period Table No 4.1.3.i Dividend per share YEAR 2011 2010 2009 2008 2007 HUL 6.50 6.50 7.50 9.00 6.00 NESTLE 48.50 48.50 48.50 42.50 33.00 BRITANNIA 6.50 25.00 40.00 18.00 15.00 MARICO 0.66 0.66 0.66 0.66 0.66

60

50 40 30 20
10 0 2011 2010 2009 2008 2007 HUL NESTLE BRITANNIA MARICO

Chart No 4.1.3.i Dividend per share Interpretation From the above chart is understood that NESTLE had made continuous growth in the dividend per share for the last five year. MARICO is having low dividend per share for the last five year.

b) EARNING PER SHARE Earnings per share = Profit after tax Preference dividend /Number of equity share Table No [Link] Earning per share YEAR 2011 2010 2009 2008 2007 HUL 10.68 10.09 11.47 8.12 8.41 NESTLE 99y .73 84.91 67.94 55.39 42.92 BRIDANNIA 12.16 48.77 75.51 79.95 45.00 MARICO 5.13 3.86 2.33 2.35 1.88

160 140 120

100
80 60 40 20 0 2011 2010 2009 2008 2007

MARICO BRIDANNIA NESTLE HUL

Chart No [Link] earning per share Interpretation From the above chart is clearly understood that BRITANNIA had made continuous low growth in the EPS for the last five year and NESTLE had made continuous growth in the EPS for the last five year.

2 PROFITABILITY RATIO
a) GROSS PROFIT MARGIN Gross profit margin = Revenue cost of goods sold / Revenue. Table No [Link] Gross profit margin YEAR 2011 2010 2009 2008 2007 HUL 12.41 14.70 13.50 15.86 15.80 NESTLE 18.48 17.87 17.58 17.20 20.05 BRITDNNIA 4.40 4.99 6.12 7.88 6.27 MARICO 13.44 15.37 13.13 12.06 17.21

25 20 15 10 5 0 2011 2010
BRITANNIA HUL

HUL NESTLE BRITANNIA MARICO

2009 2008 2007

Chart No [Link] Gross profit margin Interpretation From the above chart are shows that BRITANNIA is having low gross profit margin for the last five year.

b) OPERATING PROFIT MARGIN Operating profit margin = Operating income / Total Revenue Table No [Link] Operating profit margin. HUL NESTLE BRITANNIA 13.53 20.53 5.46 15.74 19.91 6.09 14.46 19.74 7.20 14.95 19.33 8.97 14.74 19.50 5.85

YEAR 2011 2010 2009 2008 2007

MARICO 14.62 16.63 14.01 13.26 13.77

70 60 50 40 30 20 10 0 2011 2010 2009 2008 2007 MARICO BRITANNIA

NESTLE
HUL

Chart No [Link] Operating profit margin Interpretation From the above chart shows that NESTLE is having high operating profit Margin and BRITANNIA is having low operating profit margin for the last five year.

C) NET PROFIT MARGIN Net profit margin = Net income after taxes / Revenue Table No 4.1.3.v Net profit margin. HUL NESTLE BRITANNIA 11.56 12.75 3.40 12.29 13.00 3.38 12.09 12.67 5.75 12.58 12.24 7.31 14.94 11.73 4.86

YEAR 2011 2010 2009 2008 2007

MARICO 13.29 11.65 7.35 9.06 8.39

16 14 12 10 8 6 4 2 0 2011 2010 2009 2008 2007

HUL
NESTLE BRITANNIA MARICO

Chart No 4.1.3.v Net profit margin. Interpretation From the above chart shows that HUL, NESTLE& MARICO are having high net profit margin for the last five year.

d) RETURN ON ASSEST Return on assets = Net income / Total assets*100 Table No [Link] return on assets. HUL NESTLE BRITANNIA 12.19 11.84 9.46 6.61 24.45 132.13 88.72 60.29 49.09 43.40 37.78 165.86 333.99 306.65 248.65

YEAR 2011 2010 2009 2008 2007

MARICO 14.21 9.38 6.04 4.60 3.01

350 300 250 HUL NESTLE BRITANNIA MARICO

200
150 100 50 0 2011 2010 2009 2008 2007

Chart No [Link] Return on assets. Interpretation From the above chart it is known that BRITANNIA is having high return on assets for year 2010,2009,2008 &[Link] 2011 NESTLE is having high return on asset.

3 .LIQUDUTY AND SOLVENCY RATIO.


a) CURRENT RATIO
Current ratio = current assent /current liabilities Table No [Link] Current ratio. HUL NESTLE 0.86 0.42 0.84 0.62 0.92 0.60 0.68 0.66 0.73 0.66

YEAR 2011 2010 2009 2008 2007

BRITANNIA 1.04 1.08 1.27 1.22 1.17

MARICO 0.99 1.35 1.28 1.33 0.90

100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 2011 2010 2009 2008 2007

MARICO BRITANNIA NESTLE HUL

Chart No [Link] Current ratio Interpretation From the above chart it is known that HUL, NESTLE& MARICO are having low Current ratio.

b) QUICK RATIO.
Quick ratio = (current asset inventory) /current liabilities Table No [Link] Quick ratio. HUL NESTLE 0.43 0.24 0.46 0.27 0.51 0.24 0.25 0.29 0.34 0.23

YEAR 2001 2010 2009 2008 2007 1.8 1.6 1.4

BRITANNIA 0.52 0.50 0.65 0.68 0.52

MARICO 1.70 1.23 1.25 1.07 0.55

1.2
1 0.8 0.6 0.4 0.2 0 2011 2010 2009 2008 2007

HUL NESTLE BRITANNIA MARICO

Chart No [Link] Quick ratio Interpretation From the above chart is clearly understood that MARICO had made continuous growth in the quick ratio for the last five year.

C ) DEBT EQUITY RATIO Debt equity ratio Debt / Equity

Table No [Link] Debt equity ratio YEAR 2011 2010 2009 2008 2007 HUL 0.20 0.06 0.03 NESTLE 0.76 0.01 BRITANNIA 0.96 0.08 0.03 MARICO 0.63 0.66 0.84 1.09 0.91

1.2 1 0.8 0.6 0.4 0.2 0 2011 2010 2009 2008 2007 HUL NESTLE BRITANNIA MARICO BRITANNIA HUL

Chart No [Link] Debt equity ratio. From the above chart shows that MARICO is having high debt equity ratio for the last five year.

4. DEBT COVERAGE RATIO. a) INTEREST COVERAGE RATIO


Interest coverage ratio = Earnings before interest and taxes / Interest Expense. Table No 4.1.3.x Interest coverage ratio. YEAR 2011 2010 2009 2008 2007 HUL 11243.63 395.13 116.28 83.09 171.62 NESTLE 157.92 1075.28 666.25 473.22 741.20 BRITANNIA 5.63 48.23 18.38 35.49 21.98 MARICO 18.77 21.49 10.08 12.08 10.21

12000 10000 8000 6000 MARICO BRITANNIA NESTLE HUL

4000
2000 0 2011 2010 2009 2008

2007

Chart No 4.1.3.x Interest coverage ratio. Interpretation From the above chart it is known that HUL is having high interest coverage ratio in the year 2011.

5. MANAGEMAENT EFFICIENCY RATIO a) INVENTORY TURN OVER RATIO


Inventory turnover ratio = cost of goods sold /Average inventory Table No [Link] Inventory turnover ratio HUL NESTLE BRITATINNIA 7.91 11.60 16.68 8.99 12.33 15.08 9.26 11.61 14.54 8.20 11.39 9.98 9.27 8.79 10.31

YEAR 2011 2010 2009 2008 2007

MARICO 5.98 6.36 8.22 8.48 8.39

20 15 10 5 0 2011 2010 2009 2008 2007 HUL

NESTLE
BRITANNIA MARICO

BRITANNIA
HUL

Chart No [Link] Inventory turnover ratio. Interpretation From the above chart it is clearly understood that BRITANNIA is having the high Inventory turnover ratio.

b) DEBT TURNOVER RATIO.


Debt turnover ratio = Net credit sales /average debtors(sundry debtors +bill receivable) Table No [Link] Debt turnover ratio. HUL NESTLE BRITANNIA 23.91 83.83 87.18 24.31 98.22 76.42 21.32 93.68 64.88 20.42 87.37 69.07 20.79 64.04 88.94

YEAR 2011 2010 2009 2008 2007

MARICO 21.99 25.73 37.42 37.09 30.24

100% 80% MARICO 60% 40% 20% 0% 2011 2010 2009 2008 2007 BRITANNIA NESTLE HUL

Chart No [Link] Debt turnover ratio. Interpretation From the above chart shows that HUL& MARICO are having low debt turnover ratio And BRITANNIA& NESTLE are having high turn over ratio.

c) TOTAL ASSEST TURN OVER RATIO.


Total assets turnover ratio = Table No [Link] Total assets turnover ratio. HUL NESTLE BRITANNIA 8.31 3.43 4.82 7.66 7.86 4.15 9.22 9.75 3.68 10.53 10.27 3.01 4.67 9.52 3.56

YEAR 2011 2010 2009 2008 2007

MARICO 1.70 2.20 3.01 2.87 4.35

12 10 8 6 4 2 0 2011 2010 2009 2008 2007

HUL
NESTLE BRITANNIA BRITANNIA HUL MARICO

Chart No [Link] Total assets turnover ratio. Interpretation From the above chart shows that HUL& NESTLE are having high total assets turnover ratio.

d) INVESTMENT TURNOVER RATIO


Investment turnover ratio = sales / Net worth + long term liabilitities Table No [Link] Investment turnover ratio. HUL NESTLE BRITANNIA 7.91 11.60 13.64 8.99 12.33 15.06 9.36 11.61 14.54 8.20 11.39 9.98 9.27 10.02 12.88

YEAR 2011 2010 2009 2008 2007

MARICO 5.98 6.36 8.22 8.48 8.39

100% 80% MARICO 60% 40% 20% 0% 2011 2010 2009 2008 2007 BRITANNIA NESTLE HUL

Chart No 4.1.3 xiv Investment turnover ratio. Interpretation From the above chart shows BRITANNIA& NESTLE are high Investment turn over ratio for the last five year.

e) NUMBER OF DAYS WORKING CAPITAL RATIO.


Number of days working capital ratio = Average working capital / Annual sales revenue*365 Table No [Link] Number of days working capital. HUL NESTLE BRITANNIA -20.02 -42.48 1.91 -22.62 -37.78 4.45 1.58 -41.86 13.43 -42.05 -35.17 28.82 -36.37 -35.85 9.75

YEAR 2011 2010 2009 2008 2007

MARICO 105.42 82.85 75.32 76.11 43.46

120 100 80 60 40 20 0 -20 -40 -60 Chart No 4.1.3 xv Number days working capital. Interpretation From the above chart is understood that MARICO had made continuous growth in the number of working capital for the last five year. HUL&NESTLE are having very low number of working capital. 2011 2010 2009 2008 2007 HUL NESTLE BRITANNIA MARICO

6. PAYOUT RATIO a) DIVIDEND PAYOUT RATIO


Dividend payout ratio = Dividend per share / EPS*100

Table No [Link] Dividend payout ratio YEAR 2011 2010 2009 2008 2007 HUL 71.20 75.20 76.47 131.80 81.45 NESTLE 56.47 66.54 83.52 89.76 89..50 BRITANNIA 62.10 59.77 61.97 26.34 38.94 MARICO 14.96 20.01 32.84 32.54 39.09

300 250 200 150 100 50 0 2011 2010 2009 2008 2007
MARICO BRITANNIA NESTLE HUL

Chart No 4.1.3. xvi Dividend payout ratio. Interpretation From the above chart shows that MARICO is having low dividend payout ratio for the last five year.

c) BOOK VALUE
Book value = Net worth Preference share / Total number of equity share.

Table No [Link] Book value. YEAR 2011 2010 2009 2008 2007 HUL 12.19 11.84 9.45 6.61 12.42 NESTLE 132.13 88.72 60.29 49.09 43.43 BRITANNIA 37.78 165.86 345.14 316.37 257.35 MARICO 14.21 9.38 6.04 4.60 3.01

350 300 250 200 150 100 50 0

HUL NESTLE BRITANNIA BRITANNIA HUL

MARICO

Chart No [Link] Book value. Interpretation From the above chart is clearly understood that BRITANNIA had made high growth in the Book value in the year 2010,2009.2008&2007.

You might also like